Concerts cut ticket prices and add star power

Alex Pham and Randy Lewis, Los Angeles Times

The Greek Theatre, which has hosted the likes of Steve Miller, Sheryl Crow and Ringo Starr, has canceled precious few shows in its storied past. So last year, when it crossed off nine engagements, it was nothing short of a catastrophe.

"In a normal year we'd have one or maybe two," said Alex Hodges, chief executive of Nederlander Concerts Inc., which operates the Greek Theatre. "We had never had nine."

This year, concert promoters are anxious to avert an encore of last year's disastrous season, when gross receipts fell 7.6% and notable acts such as the Jonas Brothers, Lilith Fair and Christina Aguilera canceled shows because of lackluster ticket sales.

"What happened last year was a wake-up call," said Mark Campana, president of Live Nation Entertainment Inc.'s North American concerts business. "What we realized was that you can't just wish a show home now the way you could before. You really have to work it."

This year, promoters are keeping a lid on prices, adding more star power to their tours and marketing their shows more aggressively. The winners are music lovers, who are more likely than in the last few years to see lower prices and get more bang for their buck in terms of the number and quality of performers they can see at each show.

"We're being very cautious with our pricing," said Clint Higham, manager of country star Kenny Chesney, who took a break from touring last year and is back this year for a 60-show tour. "We didn't raise any of our top-end tickets, and we lowered the prices for the back seats. The country is hurting, and people are picking and choosing when they go out. That means we have to give them a great value."

This year, Rihanna's tickets start at $19.50 compared with about $25 last year, when she canceled six stops on her tour.

In an effort to further tempt concertgoers, Ticketmaster, Live Nation's ticketing division, is also trimming its fees, particularly on the cheap seats. For tickets priced up to $25, Ticketmaster is charging an average fee of $5.21, compared with $8.25 last year, Campana said. For seats that sell for $10, the average fee this year is $2, down from $5.69 last year.

Fidgeting with the dial on prices is one way to address value. Another way is to give audiences a bigger, better show. Chesney, for example, invited the Zac Brown Band, a popular country rock group, to tour with him.

"That was expensive, but it was the right thing to do because it brought value to our audience," said Higham, who noted that the tour, which kicked off in March and ends in August, has already sold 850,000 tickets, about 75% of all tickets available.

"In the past you would have a superstar and a second- or third-tier act," Campana said. "This year, we're seeing stars with stars. You have Journey teaming up with Foreigner, Def Leppard together with Heart, Sade with John Legend, New Kids on the Block with Backstreet Boys. The list goes on."

Promoters are also trying new ways to reach fans, investing in grass-roots marketing on social networks and on mobile devices with dedicated applications, to make finding live shows and buying tickets easier.

The industry's cautious approach marks a shift: Concerts recently enjoyed a 14-year period of uninterrupted growth in overall ticket sales in North America, peaking in 2009 at $4.6 billion compared with just $950,000 in 1995, according to Pollstar, an industry trade and research publication. Average ticket prices likewise spiked to an all-time high of $67.33 in 2008, from $26.81 in 1996, Pollstar reported.

Inflating the prices over the years were demands by artists for bigger and bigger guarantees, or fees paid upfront for each show by promoters who then passed on the hikes to concertgoers by raising ticket prices. Also, in response to ticket brokers who charged exorbitant markups over face value, performers have bumped up prices for prime seats in order to hang on to a lot of the revenue that wound up going to brokers and scalpers.

"You had an incredible system of fear," said Jim Guerinot, the manager of such bands as Nine Inch Nails and No Doubt. "Artists wanted the upfront money to reduce their fear. Unfortunately, it created a pricing dynamic that consumers were not willing to sustain. And last year, the consumers said, 'No, thank you.'"

The statistics for 2010 are grim. Gross receipts in North America fell 7.6% to $4.25 billion last year from $4.6 billion in 2009, according to Pollstar. Among the top 100 tours, each show averaged $530,067 in gross ticket sales, down 15.4% from $626,813 the year before. The average number of tickets sold per show also took a nosedive, down 14.3% to 8,586 tickets in 2010 from 10,018 in 2009.

Campana said the downturn was such a jolt that Live Nation's top executives took two months in November and December canvassing dozens of agents, artists and managers to see what went wrong and find out how they could fix it.

"We didn't want to repeat history," Campana said.

Will the tweaks be enough to draw out cautious consumers?

After tightening his belt and taking on a roommate last year, forklift driver Gil Martinez felt confident enough this year to spend $180 on two tickets to see Robert Plant at the Greek Theatre.

"This is definitely a splurge," said Martinez, 44, of La Habra.

Thanks to Martinez and others who are venturing out, the Greek Theatre is seeing a "significant" uptick in sales compared with last year, Hodges said. More shows are selling out earlier, including Plant's show, which was April 23 as well as upcoming appearances by Katy Perry, Adele and Florence and the Machine.

Music festivals are reporting especially strong sales.

"The festivals are on fire this year," said Randy Phillips, chief executive of AEG Live, the nation's second-largest concert promoter. "With so many bands they can see, people see festivals as a great value."

The Coachella Music and Arts Festival, for example, sold out days in advance of its April show, and early-bird tickets for Lollapalooza, happening in August, have sold out.

Still, it's early in the season, and anything can happen, music veterans caution.

"There's always blood on the streets at the end of every concert season," Guerinot said. "But I don't think it will be as bad as last year. Everyone's wised up."